Plunge in new car sales results in £ 20bn turnover loss for industry

THE NUMBER of new cars sold in the UK last year fell by almost a third amid the coronavirus crisis and uncertainty over Brexit, figures show.

New car registrations dropped to just over 1.6 million, according to the Society of Motor Manufacturers and Traders ( SMMT), which warned of a “rocky” few months ahead. The trade organisation said a 10.9 per cent decline in December wrapped up a “turbulent” 12 months, which saw demand fall by 680,076 units to the lowest level of registrations since 1992.

New car sales fell by around 29 per cent on 2019, the biggest yearonyear decline since 1943.

The SMMT said that against a backdrop of Covid restrictions, an acceleration of the end of sale date for petrol and diesel cars to 2030, and Brexit uncertainty, the industry suffered a total turnover loss of more than £ 20bn. Private vehicle demand fell by more than a quarter, amounting to a £ 1.9bn loss of VAT to the Exchequer, while sales of vehicles to company car fleets fell by almost a third.

The SMMT reported a “bumper” year for battery and plug- in hybrid electric cars, which accounted for more than one in 10 registrations, up from around one in 30 in 2019.

Demand for battery electric vehicles ( BEVs) grew by 185.9 per cent to 108,205 units, while registrations of plug- in hybrids ( PHEVs) rose 91.2 per cent to 66,877.

Most of these were company cars, indicating that private buyers need stronger incentives to make the switch, as well as more investment in charging infrastructure, especially public on- street charging, said the

SMMT.

SMMT chief executive Mike Hawes estimated that £ 16bn needed to be spent on plug- in infrastructure because so many motorists do not have a drive and have to park on streets. More than 100 plug- in car models are available to UK buyers.